Post-Adoption Implementation of IFRS Benefits in Ethiopia; Evidence from the Banking Sector

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Date

2021-06

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A.A.U

Abstract

Different nations & companies implement IFRS standard in expectation to a number of benefits. So the aim of this study is to examine the post implementation benefit of IFRS in Ethiopia. Notwithstanding to proponents of IFRS there is a profound argument from scholars that benefit of IFRS gained not only by moving to a single set of accounting standard but also relied (directly attributed to) on supporting institutions; which constitutes for the effectiveness of IFRS implementation in each nation. Therefore the researcher assesses the benefit materialized, the effectiveness of IFRS implementation and finally measuring the extent to which the benefit materialized followed the effective IFRS implementation. To achieve this objective, both primary and secondary data were collected from IFRS implementation team members of 18 commercial banks. Sampling method purposive based on their role and involvement in the implementation process. Primary data were collected based on 5 point Likert scale structure questionnaires and interview questionnaires; whereas secondary data based were collected through documentary evidence. The Likert data smoothed by triangular fuzzy number before further analysis began using SPSS. The questionnaire data were analyzed using descriptive statistics, correlations, multiple linear regression analysis and structural equation modeling. Data from interview and document reviews were interpreted qualitatively. The statistical result show that reliable and comparable financial report produced, the benefit outweighed the cost of implementation of IFRS, reduced uncertainty and information asymmetry in the financial reports provided. The findings of the study also show that with the exception of culture the other variables educational level and professionalism, economic growth, legal protection and monitoring & enforcement positively and significantly influenced effective IFRS implementation. Finally, the study confirmed that the benefit of IFRS acquired followed effective IFRS implementation. From the finding of the qualitative data, international consulting firm played a major role for the effective implementation of IFRS; so this finding is in a conscience with AMOS result why it rejected educational level as an explanatory variable for effective IFRS implementation.

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Keywords

Implementation benefit, effective IFRS implementation, commercial Banks

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